News & Analysis as of

Board of Directors Executive Compensation Shareholder Litigation

Goodwin

Delaware Court of Chancery Rescinds Elon Musk’s $55.8 Billion Compensation Package in Cautionary Tale About Director Independence...

Goodwin on

On January 30, 2024, the Chancellor of the Delaware Court of Chancery struck down the $55.8 billion compensation plan that Tesla, Inc.’s board of directors had granted to Tesla’s well-known CEO, Elon Musk, finding that the...more

Jones Day

Shareholder Derivative Litigation Concerning Diversity in Corporate Leadership Is an Emerging Trend

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The Situation: A number of shareholder derivative lawsuits in federal court have been filed seeking to hold directors and officers of major companies accountable for alleged failures to uphold their commitment to diversity....more

Jones Day

Chancery Court Requires Entire Fairness Review of Tesla CEO Compensation

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The Background: A shareholder challenged an extraordinary and extremely lucrative incentive-based compensation package awarded by Tesla to its chair, CEO, and controlling shareholder, claiming a breach of fiduciary duties. ...more

Dechert LLP

Electricity in the Air: Court Decides that Stockholder Ratification Not Enough to Insulate Tesla CEO’s $55.8 Billion Compensation...

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The Delaware Chancery Court rejected an attempt by Tesla’s Board of Directors to dismiss a challenge to CEO Elon Musk’s “extraordinary” 2018 compensation package. Because Musk is also Tesla’s controlling stockholder, the...more

Patterson Belknap Webb & Tyler LLP

Business Judgment Rule Applies to a Board’s Response to Take “All Necessary Actions”

What legal standard applies to assess a corporate board’s refusal to pursue litigation in response to a shareholder’s demand to take “all necessary actions” to correct alleged director misconduct?...more

Hogan Lovells

New considerations for director compensation awards in light of Delaware Supreme Court's recent decision in In re Investors...

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The subject of director compensation awards has been moving up the corporate governance agenda of many public companies since December 2017. ...more

Wilson Sonsini Goodrich & Rosati

2017 Delaware Corporate Law and Litigation Year In Review

In 2017, the Delaware courts once again issued many substantive corporate law decisions covering a wide range of issues critical to boards, stockholders, and officers. In addition, decisions from recent years continued to...more

Wilson Sonsini Goodrich & Rosati

Delaware Supreme Court Issues Significant Decision Addressing Board Compensation

In December 2017, the Delaware Supreme Court issued a significant decision addressing compensation for boards of directors. The opinion also addresses compensation of members of management who serve on the board of directors....more

Troutman Pepper

Hot Topic for 2018 Proxy Season: Director Compensation in Wake of New Delaware Supreme Court Ruling

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In an important recent opinion, the Delaware Supreme Court ruled in In re Investors Bancorp, Inc. Stockholder Litigation that certain director compensation decisions would be reviewed under the “entire fairness” standard...more

Stinson LLP

Director Discretionary Compensation Subject to Entire Fairness Standard According to Delaware Supreme Court

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In a recent decision by the Delaware Supreme Court in In re Investors Bancorp Stockholders Litigation, the court found that director equity grants based on director discretion are subject to an entire fairness standard of...more

Allen Matkins

If Fee-Shifting Bylaws Are Ever Put On Trial, This Case Should Be Exhibit A

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Item 5.07(d) of Form 8-K requires issuers to disclose “the company’s decision in light of such vote as to how frequently the company will include a shareholder vote on the compensation of executives in its proxy materials...more

Snell & Wilmer

SEC Update

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PROXY SEASON PREVIEW - Say-on-Pay and Equity Compensation Plans - Although say-on-pay votes are only advisory in the United States, they will likely continue to be a focus for many companies in the upcoming 2014...more

Pillsbury Winthrop Shaw Pittman LLP

Proxy Season Brings a Third Wave of “Gotcha” Shareholder Litigation

Proxy season is upon us and the plaintiffs’ bar is demonstrating its resourcefulness by bringing a third wave of shareholder litigation. This new wave, which has not crested yet, consists of a return to derivative shareholder...more

Dechert LLP

Defending Section 162(m) Executive Compensation Derivative Suits in the United States

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Decisions regarding executive compensation fall squarely within the discretion of a public company’s board of directors. Recently, however, plaintiffs’ firms have been trying to invade the board’s purview by bringing...more

Snell & Wilmer

Delaware Law Update — Delaware Court Applies Heightened Scrutiny to Director Compensation

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In an era of intense investor scrutiny and SEC rulemaking regarding executive compensation, a recent decision by the Delaware Court of Chancery raises questions as to the protections afforded to directors when granting...more

Snell & Wilmer

Corporate Communicator - Winter 2013

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In This Issue: - 2013 Annual Meeting Season - Dealing with ISS and Other Proxy Advisory Firms this Proxy Season - SEC Update - Other NYSE/NASDAQ Developments - Delaware Law Update — Delaware Court Applies...more

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